@Palynka

Originally posted by Seitse
Are your countrymen enjoying my taxes?

I truly hope so. I worked hard and honestly for my money.
Some people over there should try doing the same.

When are you going back and ruling that chaos? You are
needed as a dictator!

it were the leaders what did it. not @Palynka.

Originally posted by zeeblebot
it were the leaders what did it. not @Palynka.

He's the only one here to take the blame though. Somebody needs to be abused.

For Great Justice. Mobilize every Zig.

Originally posted by Palynka
Don't be lazy and read the article first and then my post.

Do I have to? 🙁

Originally posted by Seitse
Do I have to? 🙁

Only if you want to abuse me.

Originally posted by Palynka
Only if you want to abuse me.

Ok, done.

That ain't news, buddy. I've been for long echoing the cry outs of
Paul Krugman when he asks a very simple question: Who rates the
rating agencies?

So... will you transfer me through paypal or bank wire? 😛

Originally posted by Seitse
Ok, done.

That ain't news, buddy. I've been for long echoing the cry outs of
Paul Krugman when he asks a very simple question: Who rates the
rating agencies?

So... will you transfer me through paypal or bank wire? 😛

I don't think the rating agencies were the problem IN THIS CASE. They started to downgrade when the spreads started to go up significantly and that was because of the problem of being exposed to market expectations. They couldn't and shouldn't have left it at AAA. Of course, this speeds up the self-fulfilling fears of the default but it was not a first cause here.

I'm all for the EU to set up their own rating agency, though, especially for regulation purposes.

Originally posted by Palynka
I don't think the rating agencies were the problem IN THIS CASE. They started to downgrade when the spreads started to go up significantly and that was because of the problem of being exposed to market expectations. They couldn't and shouldn't have left it at AAA. Of course, this speeds up the self-fulfilling fears of the default but it was not a first cause ll for the EU to set up their own rating agency, though, especially for regulation purposes.

Do you think there is a way of moderating the flock syndrome?

Or is this whole crap embedded and systemic?

...

Look what S&P and Moody's did to the world, beautifying the numbers
because nobody thought that there could be moral hazard in the
fact that the debt issuers were paying the rating agencies... not the
buyers as it was in the start!

I know, I know... two different issues, but "market regulating itself"
is, in my Keynesian eyes, simply madness.

Originally posted by Seitse
Do you think there is a way of moderating the flock syndrome?

Or is this whole crap embedded and systemic?

...

Look what S&P and Moody's did to the world, beautifying the numbers
because nobody thought that there could be moral hazard in the
fact that the debt issuers were paying the rating agencies... not the
buyers as it was in the start!

I k ...[text shortened]... o different issues, but "market regulating itself"
is, in my Keynesian eyes, simply madness.

But I'm not saying market should regulate themselves, that's an oxymoron as far as I'm concerned. But that doesn't mean that I think the specific problem here was a malfunctioning of the credit agencies. The borrowers who borrowed too much and the lenders who now are being bailed out under the guise of the EFSF.

Originally posted by Palynka
But I'm not saying market should regulate themselves, that's an oxymoron as far as I'm concerned. But that doesn't mean that I think the specific problem here was a malfunctioning of the credit agencies. The borrowers who borrowed too much and the lenders who now are being bailed out under the guise of the EFSF.

Is there something like a borrower who doesn't borrow too much?

Borrowing, by itself, is a necessary evil rather than a good. The structure
is flawed IMO.

Originally posted by Seitse
Is there something like a borrower who doesn't borrow too much?

Borrowing, by itself, is a necessary evil rather than a good. The structure
is flawed IMO.

What is flawed in its "structure"?

Originally posted by Palynka
What is flawed in its "structure"?

The world financial system?

Originally posted by Seitse
The world financial system?

Meh, now you're diverting. You were talking about borrowing itself not the architecture of the current world financial system.

Originally posted by Palynka
Meh, now you're diverting. You were talking about borrowing itself not the architecture of the current world financial system.

Well, if borrowing is a necessary evil and there is a system which
reward excessive borrowing instead of deterring it, I would way the
two topics are intertwined.

Originally posted by Seitse
Well, if borrowing is a necessary evil and there is a system which
reward excessive borrowing instead of deterring it, I would way the
two topics are intertwined.

Why is it an evil in the first place? This is the question.

Originally posted by Palynka
Why is it an evil in the first place? This is the question.

Would you borrow if you would have the cash?

Unless you have the reserves to guarantee it,
penny by penny, it is an illusion. Borrowing is
done in expectation of something future, that
may or may not happen, and that converts it
in a gamble. But gambler and the one who
accepts the gamble are in a situation where they
would not be if they would have the resources
themselves.

What is the guarantee a country gives when it
issues a bond?